TCHC employees being sued over technology appropriation

A company formerly under contract with TCHC for real estate management software claims employees used its proprietary information to boost their own IT firm.

Toronto Star
March 18, 2014
By Betsy Powell

A multi-million-dollar lawsuit alleges that two senior employees at Toronto Community Housing Corp. used their insider status to gather technology information from a private company under contract with the city’s housing agency to help their own fledgling IT business.

Named in the lawsuit launched by the Byng Group Ltd. on March 5 are the social housing agency itself, Ismail Ibrahim, TCHC’s director of compliance and legal counsel, and its manager of business efficiencies, Suman Pushparajah.

Aly Hemraj, an information technology consultant who does contract work for TCHC, is also named, as is Tru IT Solutions Inc.

No statement of defence has been filed and none of the allegations in the claim have been proven in court.

According to the statement of claim, Tru IT is a Toronto-based information technology company created in July 2012. Hemraj and Pushparajah are directors, and Ibrahim “is a shareholder, employee or consultant with Tru IT,” the court document says.

Hemraj is a director of information and technology with Housing Services Corp., a non-profit organization formed in 2004 to help Ontario public housing providers manage their building portfolios.

The lawsuit, which seeks $7 million in damages, was filed in the Ontario Superior Court of Justice by a Bay Street law firm representing the Byng Group. The Vaughan-based interior renovation general contractor specializes in multi-unit residential complexes.

The TCHC hired Byng Technology, which offers real estate management and custom communications software, in July 2009, the statement says. Incorporated in the software are “workflows” relating to construction, rental, vacancy, administration and other management processes “through which housing and vacancy management in the public housing sector is monitored and conducted,” the statement says. Byng says this is confidential and proprietary information.

Byng’s services reduced average unit turnover time from 45 days to nine and saved TCHC $2.5 million annually in vacancy loss, the document says.

In December 2012, TCHC ended its service contract with Byng, about six months after Tru IT Solutions was incorporated, the claim says.

“The defendants misappropriated the Byng Technology for their own purpose, to the detriment of the plaintiff,” according to the statement of claim. The defendants’ actions were a misuse of Byng’s confidential and proprietary information, which “violated their respective employment or other agreements ... as well as being in violation of applicable codes of conduct,” it claims.

In an emailed statement to the Star, the company said TCHC has “embarked on its own software development program with a view to replicate the functionality provided by Byng, which is in breach of its contract.” The defendants’ actions have cost taxpayers millions of dollars in vacancy loss, the statement claims.

TCHC has been served with the statement but would not comment at this time, a spokeswoman said Monday. The three named defendants didn’t respond to requests for comment.

Byng is seeking access to TCHC computers and other information. It is unclear whether TCHC will supply legal representation to its employees.